Singapore-based agriculture firm, Olam International Ltd, has made an offer to buy Dangote Flour Mills Plc.
Olam is offering N130 billion ($362 million) for DFM, which is part of the business empire of Africa’s richest man, Aliko Dangote.
The deal will be massive for Dangote who bought back the mill from Tiger Brands of South Africa for a nominal $1 in December 2015. He had agreed to invest N10 billion in the company. Today, DFM is valued at N58.75 billion as its shares jumped 9.8 percent to 11.75 naira per share after the offer was announced.
Olam was founded in Nigeria as an exporter of cashew nuts 30 years ago. Today, it has operations in about 70 countries and a market value of $4.5 billion. According to Bloomberg, the deal will enable it to build on a country workforce of almost 3,000, while tapping local demand for bakery, snacks and pasta products.
“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” K.C. Suresh, head of Olam’s grains and animal feed division, was quoted as saying in an emailed statement.
The acquisition is also part of a strategic shift toward areas that offer the most demand, including flour milling in West Africa. Nuts, cotton and tropical spices have also been earmarked for expansion, Olam said in January, while the company will exit commodities such as sugar and rubber.